Insider Trading and Large Chapter II Bankruptcies: 1995–2006

Tareque Nasser and Benton E. Gup

Chapter 8 in Financial Institutions and Markets, 2008, pp 181-210 from Palgrave Macmillan

Abstract: Abstract Several large firms that have filed for bankruptcy in recent years had been engaged in unscrupulous accounting and business practices, including, but not limited to, insider trading. For instance, several executives of World Com were either convicted or confessed to fraud and illegal insider trading. Bernard Ebbers, World Com’s chief executive, was sentenced to 25 years in prison for orchestrating his $11 billion fraud of the bankrupted telecommunication giant.’ Similarly, some Enron executives confessed to fraud and illegal insider trading and were convicted for their crimes. As a result of World Com and Enron debacles, lawmakers passed the Sarbanes-Oxley Act (SOX) that focused on corporate governance. Insider trading is one aspect of corporate governance that needs to be examined. In this chapter we explore insider trading in large U.S. publicly traded firms with assets of $1 billion or more that filed for Chapter 11 bankruptcy protection.

Keywords: Corporate Governance; Abnormal Return; Trading Volume; Inside Trading; Control Firm (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-61714-8_8

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DOI: 10.1057/9780230617148_8

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